Dana's Ribbon World makes award rosettes. Following is information about the company: Variable cost per rosette Sales price per rosette Total fixed costs per month $ 3.00 6.00 6000.00 Required: 1. Suppose Dana's would like to generate a profit of $1,160. Determine how many rosettes it must sell to achieve this target profit. 2. If Dana's sells 2,180 rosettes, compute its margin of safety in units, in sales dollars, and as a percentage of sales. 3. Calculate Dana's degree of operating leverage if it sells 2,180 rosettes 4a. Using the degree of operating leverage, calculate the change in Dana's profit if unit sales drop to 1,853 units. 4b. Prepare a new contribution margin income statement to verify change in dana's profit.

Question
Dana's Ribbon World makes award rosettes. Following is
information about the company:
Variable cost per rosette
Sales price per rosette
Total fixed costs per month
$
3.00
6.00
6000.00
Required:
1. Suppose Dana's would like to generate a profit of
$1,160. Determine how many rosettes it must sell to
achieve this target profit.
2. If Dana's sells 2,180 rosettes, compute its margin of
safety in units, in sales dollars, and as a percentage of
sales.
3. Calculate Dana's degree of operating leverage if it sells
2,180 rosettes
4a. Using the degree of operating leverage, calculate the
change in Dana's profit if unit sales drop to 1,853 units.
4b. Prepare a new contribution margin income statement
to verify change in dana's profit.

Image Transcription

Dana's Ribbon World makes award rosettes. Following is information about the company: Variable cost per rosette Sales price per rosette Total fixed costs per month $ 3.00 6.00 6000.00 Required: 1. Suppose Dana's would like to generate a profit of $1,160. Determine how many rosettes it must sell to achieve this target profit. 2. If Dana's sells 2,180 rosettes, compute its margin of safety in units, in sales dollars, and as a percentage of sales. 3. Calculate Dana's degree of operating leverage if it sells 2,180 rosettes 4a. Using the degree of operating leverage, calculate the change in Dana's profit if unit sales drop to 1,853 units. 4b. Prepare a new contribution margin income statement to verify change in dana's profit.

Expert Answer

Want to see the step-by-step answer?

See Answer

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

See Answer
*Response times vary by subject and question complexity. Median response time is 34 minutes and may be longer for new subjects.
Tagged in
BusinessAccounting

Cost Volume Profit Analysis

Related Accounting Q&A

Find answers to questions asked by student like you
Show more Q&A

Q: Hansell Company's management wants to prepare budgets for one of its products, Duraflex, for July 20...

A: Since we are entitled to answer up to 3 sub-parts, we’ll answer the first 3 schedules. Please resubm...

Q: During October, Seger Insurance employees earned $100,000 in wages. Social Security applied to $86,0...

A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. Th...

Q: Using the following facts, determine Jaron’s 2019 taxable income. 1. In November 2017, when his wife...

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and s...

Q: View Policies Current Attempt in Progress A company has three product lines, one of which reflects t...

A: Net Income: Net income is the residual amount of earnings of a company for a particular period after...

Q: Matchlessly, Inc., was organized in 2017. At December 31, 2017, the company’sBalance sheet reported ...

A: 1. Prepare journal entries.

Q: Problem 9-03A Sunland Company had the following assets on January 1, 2022. Item   Cost   Purchas...

A: Prepare journal entry for depreciation of machinery.

Q: Schedule of Cash Collections of Accounts Receivable Furry Friends Supplies Inc., a pet wholesale sup...

A: A cash budget represents the estimated cash inflows and cash outflows for a period.Cash Budget- Work...

Q: Silver Head Company is a manufacturer of kitchen utensils. It produces all of itsproducts in one dep...

A: Computation of Equivalent Units:

Q: A company had a $21,000 net loss from operations for 2016. Depreciation expenses for 2016 were $8,60...

A: Cash flow from operating activity is a part of the statement of cash flow. Operating activities desc...